Stocks of steel scraps including both processed and unprocessed at China’s 293 licensed scrapyards under Mysteel’s survey decreased 9.5% on month in May, which was due to the robust demand from the domestic steel mills as well as accelerated delivery from the scrapyards on price declines in the latter half of May, Mysteel Global noted.
As of May 31, the scrapyards, qualified under the country’s Ministry of Industry and Information Technology’s standards, were holding 978,600 million tonnes of processed and unprocessed scrap, among which, processed scrap slipped 10.7% on month to 601,000 tonnes, and unprocessed also went down by 7.3% on month to 377,700 tonnes, the survey showed.
“China’s steel mills had been actively looking for scrap supplies after the Labour Day holiday in the first week of May to maintain high output, as domestic steel prices had been surging fast,” a Shanghai-based market watcher commented.
China’s steel mills had been operating at high levels throughout last month as they had been enjoying quite decent steel margins even though the domestic steel prices plummeted over May 13-27 after having hit multi-year highs after the surges over May 6-12, as reported.
For the latter half of May, China’s steel scrap prices had been softening in tandem with the domestic steel prices, while iron ore prices had been rather resilient in comparison, and steel mills’ scrap consumption, thus, was little affected by price softening.
As of May 31, China’s HRB 400E 20mm dia rebar price, plunged by Yuan 1,091/t from May 12 to Yuan 5,257/t, while the national steel scrap pricing index subsided too by Yuan 246.5/t from May 12 to Yuan 3,517.1/t, both including the 13% VAT, both according to Mysteel’s assessment.
Shagang Group, China’s largest EAF producer in East China’s Jiangsu province, for example, also clipped its scrap procurement prices eight times by a total of Yuan 600/tonne ($94/t) over May 16-26 in reflection to lower domestic steel prices.
China’s scrap traders and scrapyards, on the concern about further price declines, had sped up their deliveries to the steel mills in order to maximize their margins, and some scrapyards had also been slowing down seeking scraps socially for processing while at the same time been eager to sell off stocks on hand, Mysteel Global noted.
For May, steel scrap consumption among China’s 61 steel mills under Mysteel’s tracking including both blast furnace and electric-arc-furnace (EAF) plants, thus, reached its three-year high of 8.13 million tonnes as of May 31, or up 7.9% on month, as during the month, imported iron ore prices had hit record highs, and domestically-generated scrap, in comparison, was with pricing competitiveness to the Chinese steel mills, market sources shared.
Written by Lindsey Lindsey, liulingxian@mysteel.com
This article has been published under an article exchange agreement between Mysteel Global and SteelMint.
Leave a Reply